Motor insurance is that aspect of vehicle ownership that provides monetary protection against motor vehicle accidents, theft, or damage. While digital platforms have come up, many still buy insurance offline because of the personal touch involved since doubts can be clarified on the spot, and sometimes, one trusts face-to-face transactions more. However, buying insurance offline has its own set of problems and pitfalls. This article enumerated common mistakes made by the insured while buying offline motor insurance and provided practical tips on avoiding them.
Not Knowing the Types of Motor Insurance
Mistake: Confusion Between Third-Party and Comprehensive Insurance
Most buyers, especially new car owners, need help understanding the difference between the two major classes of motor insurance: third-party insurance and comprehensive insurance. Such misunderstandings could take them as far as buying insufficient cover or paying out-of-pocket expenses for pricey and unwanted features.
Third-Party Insurance: This usually is the bare minimum legally bound insurance in most countries. It covers damage to another person’s vehicle or property in the case of any accident but does not cover the damages to your vehicle.
Comprehensive Insurance: It covers third-party damages, together with damages to your own vehicle for accidents, theft, and all other natural calamities.
How to Avoid It:
Do your homework before you go to the insurance office. Understand what cover you need based on your vehicle’s value, usage, and the level of risk you are exposed to. If you are unsure, ask for elaboration from the insurance agent to explain the difference in detail, and also ask for examples of when each type of insurance would be helpful.
Not Considering Add-on Covers
Mistake: Lost in the Woods of Valuable Add-Ons
While buying motor insurance offline, agents try to sell only basic policies by not informing the customer about the possible benefits of add-on covers. These add-on features are very important and related to extra protection but are usually missed by customers due to unawareness.
- The common add-ons include:
Zero Depreciation Cover: This covers the total replacement costs of car parts without considering depreciation. - Engine Protection Cover: It is pretty useful when one travels in areas prone to floods or waterlogging.
- Roadside Assistance: Immediate help could be provided in case of breakdowns.
- Consumable Cover: Covers consumables, such as nuts, bolts, lubricants, and brake oil, which a standard policy would not cover.
How to Avoid It :
Ask your agent to explain the available add-ons and how they can enhance your policy. Only purchase those that genuinely relate to you and your driving. Don’t get upsold on add-ons that you will never use.
Not Reading the Fine Print
Mistake: Not Understanding the Terms and Conditions
People must read what is inside the box before signing the insurance policy. This leads to frowns when you file your claim and know that certain damages aren’t covered or some insurance deductibles are high.
How to Avoid It :
Read the policy document carefully; take your time. Ask the insurance agent to explain anything that needs to be clarified. Some of the things that you look out for include the following:
– Exclusions: What is excluded under your policy, including particular types of damage, events, or geographical limitations?
– Deductibles: These are the charges you pay out of pocket before insurance pays the rest.
– No Claim Bonus: How it works; how you stand to gain from it over the years without making a claim.
Knowing all these details keeps you informed about the facts and protects you from being misinformed about what you are really buying.
Relying Wholly upon the Agent’s Advice
Mistake: Not Doing Your Research
Though well-informed, insurance agents are often on a commission-based sales target and may try to push policies that give them better commissions. You may not get the best policy to suit your needs if you only seek their advice.
How to Avoid It :
Do some independent research before meeting an insurance agent. Compare different company policies and customer reviews. Once you meet the agent, ask questions concerning coverages, exclusions, and claims processes. This way, you’ll appear informed, and the chances of forcing yourself into a policy that does not suit you are low.
Not Comparing Different Insurance Providers
Mistake: Loyal to One Insurance Company
Some people tend to be loyal to only one insurance company, as they might have used them in the past or on the recommendation of someone else. That means that they often miss much better deals or more suitable coverage options from other providers.
How to Avoid It :
Comparing Policies, Premiums, and Benefits: Before finalizing your motor insurance policy, visit a few more offices or agents to understand the different policies and better premiums they offer. Inquire about special offers, discounts, and better customer service. If it sounds much better elsewhere, do not hesitate to switch on your own for the sake of savings or better coverage.
Claim Settlement Ratio
Mistake: Overlooking Insurer’s Claim Settlement History
It is the percentage of the claims that the insurance company settles. Where one chooses to go with an insurance company with a low CSR, there is a possibility of delay or other adverse conditions in making a claim, in which case you have to bear the financial burden.
How to Avoid It :
Always ask for the insurance company’s claim settlement history. Go for a provider with a high CSR, preferably above 90%. This provides the necessary security and assurance that, come what may with an accident, your claim will be given all due consideration for processing quickly and smoothly.
Not checking the network of garages
Mistake: I should have checked the insurer’s network of garages
One of the benefits of comprehensive insurance is that it offers cashless repairs at network garages. But if you do not check an insurer’s network of garages, you might find yourself in a situation where you have to pay out of your pocket and then claim reimbursement.
How to Avoid It :
Check with the insurer for tie-ups with garages in your vicinity, especially with those you trust. A wide network of garages ensures convenience in cashless repairs, which could save a lot of time and money in case of accidents or damages.
Forgetting to Check the No Claim Bonus
Mistake: One should not fail to check the advantages of No Claim Bonus
The No Claim Bonus is the discount provided by insurers for not making a claim during the policy period. Many buyers either forget to check the NCB benefits or do not ask how to transfer NCB in case they are switching to another insurer.
How to Avoid It :
Ensure that the policy you choose has a No Claim Bonus and inform him about how it will affect your premium over the years. When switching insurance providers, also check if your NCB is transferred to your new policy. It can save you a lot of money when your premium runs for years.
Waiting Until the Last Minute to Renew
Mistake: Allowing the Policy to Lapse
Another common mistake is allowing the last minute to renew your motor insurance policy. If your policy is lapsing, you may be driving without insurance, which comes with penalties and higher premiums once you get around to renewing.
How to Avoid It
Set reminders for renewal dates at least a month in advance. This allows enough time to compare renewal offers, review your coverage needs, and avoid stress. Most insurers offer early renewal discounts, which save you money.
Conclusion
Buying motor insurance offline can be seamless if done with due care and the proper knowledge. The best insurance for your needs can be obtained by avoiding these prevalent mistakes:
- Ignoring the add-ons.
Failing to compare policies.
Crucial factors such as claim settlement ratio and NCB should be considered.
Be Proactive, raise the right questions, and make wise decisions to protect your vehicle and wallet.
